When Google Inc. (GOOG) bought Motorola Mobility, it was inevitable that big changes were in store. Bleeding cash, but with a lot of interesting assets -- a smartphone business, patents, and a set-top box business -- Google had chosen quite the fixer-upper.

The latter unit (set-top boxes) has been the focus of Google's latest restructuring efforts. Google will reportedly sell the unit, one of the largest producers of set-top boxes, in an auction to either a cable company like Arris Group Inc. (ARRS) or a private equity firm.

According to a report in The Wall Street Journal, a pair of sources say the auction could bring in between $1.5B and $2.5B USD for Google. Other potential bidders listed by the WSJ include France's Technicolor SA (EPA:TCH) and the UK's Pace PLC (LON:PIC).

The set-top box unit is currently engaged in a war with rival TiVo Inc. (TIVO) who produces the eponymous set-top digital video recorder (DVR). Both companies own key patents in the field and they are suing each other, each alleging infringement, in a conflict that mirrors the smartphone market's "patent war".

The sale of the set-top box unit would allow Google to focus Motorola Mobility exclusively on smartphone objectives. Google has committed to laying off 4,000 Motorola staff globally, trimming the unit's workforce by 20 percent. If the set-top box unit sale is expected to represent a "refund" of between 12 and 20 percent of the unit's $12.5B USD purchase price, which Google paid last year.

The current cable boxes are designed around the cable companies designs. Basically bare bones units that are inexpensive to produce. If Google tries to push their UI and whatnot, the cable companies won't buy it. After all, Google competes with them for video on demand with the Google Play store. The cable companies would just move to a different producer of cable boxes and Google would be left with a much less desirable division.

As for the patents, I'm sure Google will keep the patents it needs and just license them to the buyer.

"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer